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>Cryptocurrency is probably one of the worst inventions in recent memory. Do you have a source for this fact? It might survive the 50 year old fiat dollar expe

by cft 5y ago

>Cryptocurrency is probably one of the worst inventions in recent memory. Do you have a source for this fact? It might survive the 50 year old fiat dollar experiment. Until 50 years ago, there has not been a currency that wasn't backed up by something that was beyond the government

beaconstudios 5y ago
A source for this fact? It's an opinion.
- deleted 5y ago
  [deleted]
root_axis 5y ago
Bitcoin subsists on the massive electrical and internet infrastructure that is only possible through government.
- notch656a 5y ago
  Because no private enterprise could provide power or internet. Sure, some of the internet technology was invented with government grants, but lets not pretend these inventions were only inevitable due to US government. If US government were gone today the internet, electricity, and bitcoin will still be here but the usefulness of the dollar will massively decrease.
  - Guvante 5y ago
    Are we pretending that the US government is gone without a worldwide depression? (To be clear the US isn't alone, any of the major countries disappearing overnight would shock the economic system too hard to make these style what ifs meaningful) If so it wouldn't stop being valuable for quite a while still, in this hypothetical you would still have years of contracts in terms of USD, not all of which would be renegotiated for tons of reasons. Additionally most foreign trade that historically ran of the USD would want to change to a new world currency but would need to figure out what currency to use. So lets flip it on its head. What if the mining reward disappeared? Would Bitcoin survive?
    - notch656a 5y ago
      >Are we pretending that the US government is gone without a worldwide depression? (To be clear the US isn't alone, any of the major countries disappearing overnight would shock the economic system too hard to make these style what ifs meaningful) Crytpo will march on with or without US government, I don't see them as existential concern for BTC or other crypto. I'm not sure if BTC will survive once there is nothing to mine, but other crypto like XMR has infinite tail emission thus mining never dies. I apologize but here I often use BTC interchangeably to mean PoW cryptos in general. I shouldn't do that.
  - politician 5y ago
    I'd argue the opposite, if the US government ceased to exist, the electrical grids in North America would collapse shortly thereafter, followed by the Internet and Bitcoin. Without the rule of law and threat of prosecution, a massive surge in usage due to theft would overwhelm systems. Without the nuclear status quo and the threat of retaliation, NA would either be glassed or invaded.
    - notch656a 5y ago
      They would probably be collapsed in the short term and eventually be replaced by something, if not decentralized power generation. >Without the rule of law and threat of prosecution, a massive surge in usage due to theft would overwhelm systems. I used both internet and electricity in Northern Syria circa 2015, provided by private providers, and it seemed to work just fine then. Why you think rule of law is so important to internet existing? If the dude running the cell phone towers and cell phone stand points an AK out the window when they see a crook, most people decide not to theft that. You don't need central power grid to have enough electricity to run phones and cryptocurrencies. >Without the nuclear status quo and the threat of retaliation, NA would either be glassed or invaded. Or cooperative militias and private individuals ally with someone with nukes or seize the ones already in existence. Not to mention invading American part of NA is hilariously foolish as there would be a "rifle behind every blade of grass."
      - analog31 5y ago
        Sounds like the next startup mecca. Now, before bitcoin, where did smart people put their savings? Probably, any money that wasn't needed for immediate liquidity went into dollars or euro or securities denominated in those currencies. The present state of the art is that cryptocurrency is an arbitrage that converts subsidized electricity into value that can be transported out of the country.
        notch656a 5y ago
        Without bitcoin I would still advise putting savings in stocks, bonds, a little precious metals maybe. I don't see bitcoin as savings as much as a currency or insurance policy against all your material assets and bank accounts being seized and/or stolen. >that can be transported out of the country. There's a lot of value in this though, no? The 10k limit on undeclared financial instruments held in your personal custody through customs and KYC/AML laws in banking mean crypto fits a big void that was previously much harder to fill.
  - root_axis 5y ago
    Private enterprise providing power and internet would be a massive disaster, this is the reason we have utilities; a cadre of competitors dredging up the shared public space to each erect their own private lines would create a hideous patchwork of incompatible and inefficient infrastructure that would have completely destroyed any possibility for the internet as we know it today.
  - analog31 5y ago
    If not for the relative regularization of commerce provided by corporate law, and relative stability achieved through economic policy, I think there would be no investment in great ventures of the scale needed to build the electric grid, semiconductor manufacturing, telecommunications, etc. The limitation of liability granted to the shareholders of corporations is the granddaddy of all entitlements, because it enables relatively hands off investment. Without those things, a "big business" would be on the scale of a corner grocery store, or a family owned factory.
    - notch656a 5y ago
      Those achievements are through cooperative contracts and agreements. That can happen without US government. They can even happen without any government at all. Government after all is just a body with a monopoly on violence.
      - analog31 5y ago
        I don't think contracts can replace law. Imagine having to read and understand a unique 3000 page contract in order to buy a share of stock, or a house, or to get married. Imagine trying to do something like loan money if you have no way of knowing what someone's existing financial obligations are. I think the volume of economic activity would plummet. "Monopoly on violence" is something I've heard about before. Is this theory supported by evidence? Actually I think that a monopoly on violence might be a good thing. The number of bodies that can engage in violence is either 0 or 1, or many. I read a translation of Njal's Saga which takes place in pre-literate Iceland. The erstwhile "government" had no monopoly on violence, except to assign cash damages in lawsuits. What the saga describes is basically a continuous blood feud.
        kaba0 5y ago
        Also, people doesn’t seem to know about the separation of power. The US is definitely not the best example from the point of view of a totally democratic state, but a financial system does need some kind of “admin account” to actually dispute/enforce the agreed upon law. This is not solved by cryptos at all.
Guvante 5y ago
Don't believe the lies they say about fiat currencies in crypto circles. Currency is way more complicated than they lead you to believe. After all fractional reserve banking has existed since before currency did. And if you have fractional reserve banking you aren't "back up by something" unless you count the credit of the bank as something. Given that is the literal definition of fiat currency (backed by the full faith and credit of the United States) that means that it is way more complicated than the gold standard. To give a modern example (the gold standard no longer exists anywhere) many countries have a fixed currency backed by the USD. Since fractional reserve banking is a thing there too it isn't like the country is holding onto $1 USD for every $1 USD equivalent of currency. However it isn't like there isn't a relationship so the source of that relationship is government exchange. You can exchange $1 USD equivalent of currency for $1 USD. Now we get to the real wrinkle. How can countries have higher inflation than the USD if they are locked with USD? (Which they objectively have) By simply restricting the amount of currency that can be exchanged for USD. This can be hand waved around pretty easy "we have a shortage" or "it is difficult to obtain that much". Now you have a fiat currency in reality but technically it is a backed currency. To be clear it isn't like ditching the gold standard was without downsides, this is just long enough to point out that broad statements like "backed by anything" fail to account for the reality of backed currencies in a modern financial system.
- notch656a 5y ago
  >After all fractional reserve banking has existed since before currency did. We don't even have fractional reserve banking. There is no reserve ratio, it's 0. Bernanke's own published book states it is only fractional reserve banking when it is required to keep a fractional reserve.
  - Guvante 5y ago
    I am talking about the consequence of fractional reserve banking. Specifically that money is made by banks to some amount. Also I think saying "we don't have fractional reserve banking" is needlessly splitting hairs. The requirements are just more complicated than "hold onto X% of deposits".
- 5y ago
8note 5y ago
Gold isn't backed up by anything. If anything, government is a stronger backing than before

by cft 5y ago

beaconstudios 5y ago

A source for this fact? It's an opinion.

deleted 5y ago
[deleted]

root_axis 5y ago

Bitcoin subsists on the massive electrical and internet infrastructure that is only possible through government.

notch656a 5y ago
Because no private enterprise could provide power or internet. Sure, some of the internet technology was invented with government grants, but lets not pretend these inventions were only inevitable due to US government. If US government were gone today the internet, electricity, and bitcoin will still be here but the usefulness of the dollar will massively decrease.
- Guvante 5y ago
  Are we pretending that the US government is gone without a worldwide depression? (To be clear the US isn't alone, any of the major countries disappearing overnight would shock the economic system too hard to make these style what ifs meaningful) If so it wouldn't stop being valuable for quite a while still, in this hypothetical you would still have years of contracts in terms of USD, not all of which would be renegotiated for tons of reasons. Additionally most foreign trade that historically ran of the USD would want to change to a new world currency but would need to figure out what currency to use. So lets flip it on its head. What if the mining reward disappeared? Would Bitcoin survive?
  - notch656a 5y ago
    >Are we pretending that the US government is gone without a worldwide depression? (To be clear the US isn't alone, any of the major countries disappearing overnight would shock the economic system too hard to make these style what ifs meaningful) Crytpo will march on with or without US government, I don't see them as existential concern for BTC or other crypto. I'm not sure if BTC will survive once there is nothing to mine, but other crypto like XMR has infinite tail emission thus mining never dies. I apologize but here I often use BTC interchangeably to mean PoW cryptos in general. I shouldn't do that.
- politician 5y ago
  I'd argue the opposite, if the US government ceased to exist, the electrical grids in North America would collapse shortly thereafter, followed by the Internet and Bitcoin. Without the rule of law and threat of prosecution, a massive surge in usage due to theft would overwhelm systems. Without the nuclear status quo and the threat of retaliation, NA would either be glassed or invaded.
  - notch656a 5y ago
    They would probably be collapsed in the short term and eventually be replaced by something, if not decentralized power generation. >Without the rule of law and threat of prosecution, a massive surge in usage due to theft would overwhelm systems. I used both internet and electricity in Northern Syria circa 2015, provided by private providers, and it seemed to work just fine then. Why you think rule of law is so important to internet existing? If the dude running the cell phone towers and cell phone stand points an AK out the window when they see a crook, most people decide not to theft that. You don't need central power grid to have enough electricity to run phones and cryptocurrencies. >Without the nuclear status quo and the threat of retaliation, NA would either be glassed or invaded. Or cooperative militias and private individuals ally with someone with nukes or seize the ones already in existence. Not to mention invading American part of NA is hilariously foolish as there would be a "rifle behind every blade of grass."
    - analog31 5y ago
      Sounds like the next startup mecca. Now, before bitcoin, where did smart people put their savings? Probably, any money that wasn't needed for immediate liquidity went into dollars or euro or securities denominated in those currencies. The present state of the art is that cryptocurrency is an arbitrage that converts subsidized electricity into value that can be transported out of the country.
      - notch656a 5y ago
        Without bitcoin I would still advise putting savings in stocks, bonds, a little precious metals maybe. I don't see bitcoin as savings as much as a currency or insurance policy against all your material assets and bank accounts being seized and/or stolen. >that can be transported out of the country. There's a lot of value in this though, no? The 10k limit on undeclared financial instruments held in your personal custody through customs and KYC/AML laws in banking mean crypto fits a big void that was previously much harder to fill.
- root_axis 5y ago
  Private enterprise providing power and internet would be a massive disaster, this is the reason we have utilities; a cadre of competitors dredging up the shared public space to each erect their own private lines would create a hideous patchwork of incompatible and inefficient infrastructure that would have completely destroyed any possibility for the internet as we know it today.
- analog31 5y ago
  If not for the relative regularization of commerce provided by corporate law, and relative stability achieved through economic policy, I think there would be no investment in great ventures of the scale needed to build the electric grid, semiconductor manufacturing, telecommunications, etc. The limitation of liability granted to the shareholders of corporations is the granddaddy of all entitlements, because it enables relatively hands off investment. Without those things, a "big business" would be on the scale of a corner grocery store, or a family owned factory.
  - notch656a 5y ago
    Those achievements are through cooperative contracts and agreements. That can happen without US government. They can even happen without any government at all. Government after all is just a body with a monopoly on violence.
    - analog31 5y ago
      I don't think contracts can replace law. Imagine having to read and understand a unique 3000 page contract in order to buy a share of stock, or a house, or to get married. Imagine trying to do something like loan money if you have no way of knowing what someone's existing financial obligations are. I think the volume of economic activity would plummet. "Monopoly on violence" is something I've heard about before. Is this theory supported by evidence? Actually I think that a monopoly on violence might be a good thing. The number of bodies that can engage in violence is either 0 or 1, or many. I read a translation of Njal's Saga which takes place in pre-literate Iceland. The erstwhile "government" had no monopoly on violence, except to assign cash damages in lawsuits. What the saga describes is basically a continuous blood feud.
      - kaba0 5y ago
        Also, people doesn’t seem to know about the separation of power. The US is definitely not the best example from the point of view of a totally democratic state, but a financial system does need some kind of “admin account” to actually dispute/enforce the agreed upon law. This is not solved by cryptos at all.

Guvante 5y ago

Don't believe the lies they say about fiat currencies in crypto circles. Currency is way more complicated than they lead you to believe. After all fractional reserve banking has existed since before currency did. And if you have fractional reserve banking you aren't "back up by something" unless you count the credit of the bank as something. Given that is the literal definition of fiat currency (backed by the full faith and credit of the United States) that means that it is way more complicated than the gold standard. To give a modern example (the gold standard no longer exists anywhere) many countries have a fixed currency backed by the USD. Since fractional reserve banking is a thing there too it isn't like the country is holding onto $1 USD for every $1 USD equivalent of currency. However it isn't like there isn't a relationship so the source of that relationship is government exchange. You can exchange $1 USD equivalent of currency for $1 USD. Now we get to the real wrinkle. How can countries have higher inflation than the USD if they are locked with USD? (Which they objectively have) By simply restricting the amount of currency that can be exchanged for USD. This can be hand waved around pretty easy "we have a shortage" or "it is difficult to obtain that much". Now you have a fiat currency in reality but technically it is a backed currency. To be clear it isn't like ditching the gold standard was without downsides, this is just long enough to point out that broad statements like "backed by anything" fail to account for the reality of backed currencies in a modern financial system.

notch656a 5y ago
>After all fractional reserve banking has existed since before currency did. We don't even have fractional reserve banking. There is no reserve ratio, it's 0. Bernanke's own published book states it is only fractional reserve banking when it is required to keep a fractional reserve.
- Guvante 5y ago
  I am talking about the consequence of fractional reserve banking. Specifically that money is made by banks to some amount. Also I think saying "we don't have fractional reserve banking" is needlessly splitting hairs. The requirements are just more complicated than "hold onto X% of deposits".
5y ago

8note 5y ago

Gold isn't backed up by anything. If anything, government is a stronger backing than before